EU Trade Commissioner Karel De Gucht spelled out the regulatory issues in a speech to the Aspen Institute's Prague annual conference, TTIP - Solving the Regulatory Puzzle. Goods trying to enter a country can be blocked by regulatory issues in a variety of ways. For example, they can be blocked because the regulations are written in such a way as to deem the imported goods "unsafe" (by, say, refusing to recognize any scrutiny processes in the exporter's home country as authoritative); or, they can add huge compliance costs which act as a kind of concealed and hard-to-address tariff.

De Gucht argues that, while regulatory activities are necessary, regulators in different jurisdictions need to get together to ensure that they are basing their analysis on the best data available, and using best practice. As he puts it:

"Regulations in different countries can be different simply because regulators weren't aware that there were other ways to solve the problem they were facing."

Things get much more difficult, not to say intractable, where two different groups of regulators differ fundamentally on the philosophical approach to be taken to regulation.

One obvious instance is the huge gap between a regulatory style based on prescription versus a regulatory style based on principals. The former approach instinctively dislikes leaving lots of "wriggle room" around compliance, and seeks to legislate an all-embracing framework of laws - the US Dodd Frank Act, with its thousands of rules, being a classic case in point. The latter approach seeks to define the principles to be followed and then, in extreme cases, leaves it up to the organization concerned to work out how to comply. The US favors the former approach; the latter is the preferred route of UK regulators and, to a somewhat lesser extent, the EU. This distinction between prescription and principles-based approaches has bedeviled attempts to unify the accounting standards of the US and the International Financial Reporting Standards, and it shows up particularly strongly in the different approaches taken by the US Securities and Exchange Commission (SEC) and the UK and EU regulatory authorities.

One arm of De Gucht's approach to dismantling regulatory barriers is simply to state Europe's case as plainly as possible. The EU, he says, combines open market access to 500 million people together with what is taken as gold standard regulatory protection, as emulated by many countries around the world. The subtext is that US regulators need to wake up to this fact and stop thinking that any regulation not made in the USA can't be good enough. The EU consults widely before it introduces new regulations, including providing World Trade Organization members with draft texts of proposed legislation. For TTIP to work, EU and US regulators need to work on rules that will affect the other side - to open channels of information at an early stage and to consult.

That way, the EU and the US will be able to avoid the state of affairs that De Gucht relates to the automotive industry - where, despite the fact that EU and US cars are equally safe to drive, the safety regulations in each zone could hardly be more different or diverse "for everything from headlamps to electric windows". At the moment, we have the absurd state of affairs where EU and US inspectors both inspect the same pharmaceutical factory premises, each checking virtually the same things for themselves. What is needed is progress on recognizing that one side's inspection is as good as the other's, thus avoiding needless duplication of effort and saving taxpayer money that could be better spent elsewhere.

The financial sector is probably the least functional area between the two continents, despite the fact that both sides recognize absolutely that the risks facing the financial sector are global in nature. What we have is a fundamental difference of approach and inconsistencies everywhere. As De Gucht notes:

"This has a cost: it weakens financial resilience and makes it more difficult for our economies to recover."

What he suggests is that the TTIP establishes a new Regulatory Cooperation Council which brings together the heads of the most important EU and US regulatory agencies to look at the priorities for regulatory cooperation. He argues that progress can be made here without weakening the standards of protection for either the citizens of Europe or the citizens of the US. Proving this, of course, will be the rub - particularly when parochialism runs so deep in both European national politics and US state politics. However, Europe is nothing if not a talking shop, and jaw-jaw is what is needed to get the TTIP off the ground - assuming the US shutdown drama gets shut down in time!